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Canada’s high wireless prices justified by the quality of networks, think tank says

By David PaddonThe Canadian Press

Tues., May 8, 2018

Canadians like to complain about paying some of the world’s highest wireless prices, but a Montreal Economic Institute report says they should also acknowledge the cost of having some of the world’s most advanced networks.

“Yes, we pay more. But we get a lot more. That’s what I’d like people to take into consideration when they complain about their prices,” author Martin Masse said in an interview before the report’s publication on Tuesday.

Hundreds of consumers making submissions to the CRTC's public consultations have generally rejected the pricing proposals submitted recently by Canada's three main carriers as too expensive. (Doug Ives / THE CANADIAN PRESS)

His 40-page report says Canadian wireless carriers are among the biggest investors in network infrastructure “however one calculates it: per connection, per subscriber, per capita, or as a percentage of their revenue.”

The benefit, it adds, is that Canadian carriers are consistently ranked among the fastest in the world, citing statistics from telecom equipment maker Cisco and Open Signal, which measure networks in various countries.

The Montreal Economic Institute, which takes an anti-regulatory stance, receives some funding from the telecommunications industry players but says it makes its choices independently.

The study comes as the Canadian Radio-television and Telecommunications Commission is in the midst of requiring Rogers, Bell and Telus to add a basic, data-only wireless service to their product lineup.

Rogers has proposed a $25 per month plan with 400 megabytes of data at 4G speeds. Bell and Telus have suggested 500 MB of data at LTE speeds for $30 per month.

Katy Anderson of Open Media, an advocacy group that pushes for lower-cost telecommunications services, said “at the end of the day, we know that so many Canadians pay way too much for their cellphone services.”

She pointed to a short-lived price war last December, when Rogers, Telus and Bell offered heavily discounted plans with 10 gigabytes of data for $60 per month.

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“I think it just shows you that if one gives a cheaper option, they’ll all go that way. Then, on the other hand, once they start to raise their prices we see that the companies tend to raise their prices (to be) pretty similar.

John Lawford of the Public Interest Advocacy Group, which also pushes for consumer-friendly telecom policies, said that countries like Finland and South Korea also have good networks but at lower prices than Canada’s.

He adds that regions within Canada that have a “strong” fourth carrier enjoy average discounts of between seven and 25 per cent than those without.

Masse said he doesn’t think Canada should follow Europe’s lead, or even the United States, in emphasizing low prices over investments on advanced fourth-generation and fifth-generation networks.

“In five years, when we have our 5G networks deployed here ... in Europe they will still pay low prices for crappy services and no 5G, or years behind us in deploying 5G, which will have an impact on their whole economy.

“We all want to pay less. But is this what we want?”

Independent consultant Mark H. Goldberg, who organizes the annual Canadian Telecom Summit, said in an email that he agrees that a focus on price alone doesn’t make sense with something as complex as wireless.

“We are still seeing hundreds of thousands of new customers each quarter, which seems to indicate that Canadians are still seeing value and getting their first phones,” Goldberg said. “I think that is an encouraging signal.”

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